SUPREME COURT OF THE STATE OF CALIFORNIA

SPRINT TELEPHONY PCS, L.P., Plaintiff/Appellant, vs. COUNTY OF SAN DIEGO, ET AL., Defendants/Respondents.

Case No. S145541

After Decision by the Court of Appeal, Fourth Appellate District, Division One

Court of Appeal No. D045957

APPLICATION FOR LEAVE TO FILE AMICI CURIAE BRIEF AND BRIEF OF AMICI CURIAE THE

LEAGUE OF CALIFORNIA CITIES AND THE CALIFORNIA STATE ASSOCIATION OF COUNTIES

IN SUPPORT OF DEFENDANTS/ RESPONDENTS THE COUNTY OF SAN DIEGO, ET AL.

DENNIS J. HERRERA, State Bar #139669 City Attorney BURK E. DELVENTHAL, State Bar #45007 Chief Government Team Deputy THERESA L. MUELLER, State Bar #172681 Chief Energy and Telecommunications Deputy DANNY Y. CHOU, State Bar #180240 Chief Appellate Attorney WILLIAM K. SANDERS, State Bar #154156 Deputy City Attorney 1 Dr. Carlton B. Goodlett Place City Hall, Room 234 San Francisco, California 94102-4682 Tel: (415) 554-6771 Fax: (415) 554-4757 Attorneys for Amici Curiae League of California Cities and California State Association of Counties

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................................................... iii APPLICATION FOR LEAVE TO FILE AMICI CURIAE BRIEF............. 1

INTRODUCTION ........................................................................................ 3

STATEMENT OF FACTS ........................................................................... 5

HISTORICAL BACKGROUND.................................................................. 6

A. The Development Of The Landline Telephone Network ....................................................................... 6

B. The Development Of The Wireless Telecommunications Network..................................... 8

C. The Regulation Of Telephone Corporations In The State Of California.............................................. 10

D. The Continuing Need To Build And Maintain Landline Facilities ..................................................... 14

LEGAL DISCUSSION............................................................................... 17

I. PUBLIC UTILITIES CODE § 7901 DOES NOT PREEMPT THE COUNTY ORDINANCE ......................... 17

A. The Scope Of Preemption Is A Matter Of Statutory Construction ............................................... 17

B. Section 7901 Does Not Preempt Local Laws Regulating The Use Of The Public Rights-Of-Way By Telephone Corporations .............................. 18

II. THE RESTRICTION ON A TELEPHONE CORPORATION’S EXERCISE OF ITS FRANCHISE RIGHTS CONTAINED IN § 7901 SHOULD BE CONSTRUED IN FAVOR OF LOCAL GOVERNMENTS ................................................................ 23

III. SPRINT IS NOT A “TELEPHONE CORPORATION” THAT HAS A STATE FRANCHISE TO CONSTRUCT “TELEPHONE LINES” IN THE PUBLIC RIGHTS-OF-WAY ............................................... 31

A. Sprint’s Wireless Facilities Are Not “Telephone Lines” As That Term Is Used In § 7901.................... 31

B. Sprint Is Not A “Telephone Corporation” As That Term Is Used In § 7901..................................... 33

i

IV. THIS COURT SHOULD NOT DECIDE WHETHER FEDERAL LAW PREEMPTS § 7901. ................................ 35

CONCLUSION........................................................................................... 37

CERTIFICATE OF COMPLIANCE.......................................................... 38

ii

TABLE OF AUTHORITIES State Cases Big Creek Lumber Co. v. County of Santa Cruz

(2006) 38 Cal.4th 1139...................................................................... 18, 19

Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 724....................................................................... 17

Eu v. Chacon (1976)16 Cal.3d 465................................................................................ 23

Friedman v. City of Beverly Hills (1996) 47 Cal.App.4th 436...................................................................... 18

Golden Gate Scenic Steamship Lines, Inc. v. Public Utilities Commission (1962) 57 Cal.2d 373............................................................................... 22

Oro Electric Corp. v. Railroad Commission (1915)169 Cal. 466............................................................................ 12, 34

Pacific Tel. & Tel. Co. v. City and County of San Francisco (1959) 51 Cal.2d 766......................................................................... 19, 28

Pacific Tel. & Tel. Co. v. City of Los Angeles (1955) 44 Cal.2d 272......................................................................... 20, 27

Pacific Tel. & Tel. v. City and County of San Francisco (1961) 197 Cal.App.2d 133..................................................................... 21

People v. Butler (1996) 43 Cal.App.4th 1224.................................................................... 18

People v. Williams (2001) 26 Cal.4th 779.............................................................................. 24

Postal Telegraph-Cable Co. v. Railroad Commission (1927) 200 Cal. 463........................................................................... 29, 34

Proctor v. San Francisco Port Authority (1968) 266 Cal.App.2d 675...................................................................... 24

San Diego Gas & Elec. Co. v. City of Carlsbad

(1998) 64 Cal.App.4th 785................................................................ 19, 29

iii

Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893.......................................................................... 18, 19

Sunset Tel. & Tel. Co. v. City of Pasadena (1911) 161 Cal. 265............................................................................ 24, 32

Western Union Tel. Co. v. City of Visalia

(1906) 149 Cal. 744..................................................................... 26, 27, 28

Western Union Tel. Co. v. Hopkins (1911) 160 Cal. 106................................................................................. 20

Williams Communications, LLC v. City of Riverside (2003) 114 Cal.App.4th 642.................................................................... 34

State Statutes and Codes Civil Code

Section 536 (repealed)...................................................................... passim Section 1069 ............................................................................................ 23 Code of Civil Procedure Section 664.5 ........................................................................................... 35 Section 902.1 ........................................................................................... 35 Government Code

Section 50030.......................................................................................... 22 Public Utilities Act (repealed)

Section 2(s)........................................................................................ 12, 32 Section 2(t) .............................................................................................. 12

Section 13(a)............................................................................................ 12 Section 50(b) ........................................................................................... 11

Public Utilities Code

Section 203.............................................................................................. 33 Section 233....................................................................................... passim Section 234........................................................................................ 16, 35

Section 247.............................................................................................. 14 Section 1001...................................................................................... 12, 13 Section 2902..................................................................................... passim Section 7901..................................................................................... passim

Section 7901.1 ................................................................................... 29, 30 Section 7901.1(a) .................................................................................... 29 Section 5800............................................................................................ 16

iv

Rules of Court Rule 8.520(f) ............................................................................................. 1

Uncodified Laws Stats. 1850, ch. 128, § 150, p. 369 (repealed) ......................................... 10 Stats. 1857, ch. 147, § 1, p. 171 (repealed) ............................................ 11 Stats. 1915, ch. 646, § 1, pp. 1273-74 (repealed)........................ 11, 12, 28 State Constitutional Provisions Article XI Section 7 .................................................................................................. 18 Article XII

Section 5 .................................................................................................. 11 Section 23 (repealed)............................................................................... 11

Federal Cases GTE Mobilnet of California, L.P. v. City and County of San Francisco

(N.D. Cal. 2006) 440 F.Supp.2d 1097 .................................................... 14 GTE Mobilnet of California L.P. v. City and County of San Francisco

(N.D. Cal, Feb. 6, 2007) 2007 WL 420089............................................. 10 Level 3 Communications, L.L.C. v. City of St. Louis

(8th Cir. 2007) 477 F.3d 528................................................................... 36 Sprint Telephony PCS, L.P. v. County of San Diego

(9th Cir. 2007) 479 F.3d 1061................................................................. 35 Federal Statutes and Codes 47 United States Code

Section 253........................................................................................ 35, 36 Section 332(c)(3)..................................................................................... 14 Section 332(c)(3)(A) ............................................................................... 14 Section 332(c)(7)(B)(ii)........................................................................... 36

California Public Utilities Commission Decisions In the Matter of the Application of Orange County Radiotelephone

Service, Inc. (1986) Decision No. 86-12-094, 1986 Cal. PUC. LEXIS 873................ 13

v

Investigation on the Commission’s Own Motion into Mobile Telephone and Wireless Communications (1998) Decision No. 98-07-037, 1998 Cal. PUC LEXIS 339................. 14

Order Instituting Rulemaking on the Commission’s Own Motion into Competition for Local Exchange Service (1998) Decision No. 98-10-058, 1998 Cal. PUC LEXIS 879................. 22

Order Instituting Rulemaking on the Commission’s Own Motion to Assess and

Revise the Regulation of Telecommunications Utilities Decision (2006) Decision No. 06-08-030, 2006 Cal. PUC LEXIS 367................... 8

Order Instituting Rulemaking on the Commission’s Own Motion to Develop Revisions to General Orders and Rules Applicable to Siting and Environmental Review of Cellular Mobile Radiotelephone Utility Facilities (1996) Decision No. 96-05-035, 1996 Cal. PUC LEXIS 288................. 22

Radio Electronic Products Corp. v. Paul E. Boer (1972) Decision No. 79799, 1972 Cal. PUC LEXIS 790. ...................... 14 Robert C. Crabb (Mt. Shasta Radiotelephone Co.) Authorized to Operate

Radiotelephone Utility in Mt. Shasta and Environs (1970) Decision No. 77573, 1970 Cal. PUC LEXIS 932 ....................... 13

Federal Communications Commission Decisions

General Mobile Radio Service, Report and Order of the Commission 13 F.C.C. 1190 (1949)............................................................................... 9

Other Authorities Assem. Com. on Local Government, Rep. on Senate Bill No. 1896

(1995-1996 Reg. Sess.) (June 19, 1996) ................................................. 23

AT&T: A Brief History (www.corp.att.com/history/history1.html).............. 6

Bellis, Selling The Cell Phone: History of Cellular Phones (http://inventors.about.com/library/weekly/aa070899.htm)...................... 8

Berresford, The Impact of Law and Regulation on Technology: The Case History of Cellular Radio (1989) 44 Bus. Lawyer 721............................. 8

Brief History of Wireless Communications http://wireless.ece.ufl.edu/~jshea/eel6509/misc/history.html ................... 8

Brotman, Communications Law and Practice (2006)................................... 6

vi

Brown, Letting Go of Your Landline http://technology.inc.com/telecom/articles/200609/landlines.html ........ 15

California Public Utilities Commission Broadband Report (Sept. 2006 update) http://www.cpuc.ca.gov/static/telco/reports/ broadbandreports.htm ..... 15

Cellular Telecommunication Industry Association Semi-Annual Wireless Industry Survey (2006) http://files.ctia.org/pdf/CTIA_Survey_Year_ End_2006_Graphics.pdf...................................................................... 9, 10

Dart, Americans hanging up on landlines (April 13, 2007) http://www.ajc.com/search/content/news/stories/2007/04/16/0413 natphones.html ........................................................................................ 15

Federal Communications Commission Report (February 2007) Trends in Telephone Service http://www.fcc.gov/wcb/iatd/trends.html ................. 15

Galambos and Abramson, Anytime, Anywhere, Entrepreneurship and the Creation of a Wireless World (2002) ........................................................ 8

Garnet, The Telephone Enterprise, the Evolution of the Bell System’s Horizontal Structure, 1879-1909 (1985) ................................................... 6

Haugsted, Calif. OKs Statewide-Franchise Rules Public Utilities Commission Ruling Cheered by Verizon, Booed by Consumer Groups, Municipalities (Mar. 2, 2007), http://www.multichannel.com/article/CA6421022. html?display=Breaking+News................................................................ 16

Hu, SBC to invest $4 billion in fiber upgrade (Nov. 11, 2004) http://news. com. com/SBC+to+invest+4+billion+in+fiber+upgrade/2100-1034_3-5449219.html?tag= item ............................................................ 16

Perez, Cable VoIP Market Set to Surge (Aug. 4, 2006) http://www.voip-news.com/news/cable-voip-market-report-080406/.... 16

Sen. Rules Com., Office of Senate Floor Analyses, Analysis of Sen. Bill 621 (1995-1996 Reg. Sess.) (Aug. 31, 1995)................................................. 30

The Telco TV Boxes Are Coming!, http://saveaccess.org/telcobox ............ 17

Upbin, Verizon’s $18 Billion Gamble (Jan. 9, 2007), http://www.forbes.com /technology/2007/01/09/fios-fiber-broadband-tech-media-cz_bu_0109ces-verizon.html............................................................................................. 16

Valle-Riestra, Telecommunications, The Governmental Role in Managing the Connected Community (2002) .................................................................. 6

vii

Websters 1928 Dictionary, http://65.66.134.201/cgi-bin/webster/webster. exe?search_for_texts _web1828 ............................................................. 24

Wikipedia, http://en.wikipedia.org................................................................ 6

viii

APPLICATION FOR LEAVE TO FILE AMICI CURIAE BRIEF

Under Rule 8.520(f) of the California Rules of Court, Amici Curiae the

League of California Cities (the “League”) and the California State

Association of Counties (“CSAC”) respectfully request leave to file the

accompanying Amici Curiae brief in support of defendants/respondents the

County of San Diego, et al. (hereinafter the “County”). Amici have a

substantial interest in the outcome of this appeal, in which the Court must

address the following issue: Whether and to what extent Public Utilities Code

§ 7901 preempts the County ordinance regulating the construction of wireless

telecommunications facilities in the public rights-of-way.

The League is an association of 478 California cities united in

promoting the general welfare of cities and their citizens. The League is

advised by its Legal Advocacy Committee, which is comprised of 24 city

attorneys representing all 16 divisions of the League from all parts of

California. The Legal Advocacy Committee monitors appellate litigation

affecting municipalities and identifies those that are of statewide significance

to its member cities.

CSAC is a non-profit corporation whose membership consists of the 58

California counties. CSAC sponsors a Litigation Coordination Program,

which is administered by the County Counsels’ Association of California (the

“Association”) and is overseen by the Association’s Litigation Overview

Committee, comprised of county counsels throughout the state. The

Litigation Overview Committee monitors litigation of concern to counties

statewide.

Both the League and CSAC appear frequently before the courts of this

state as Amici Curiae on matters affecting local governments. Many of the

League’s member cities and CSAC’s member counties regulate use of the

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public rights-of-way by telephone companies including those offering wireless

telecommunications services. As a result, both the League and CSAC have

determined that this case is important.

Counsel for Amici have reviewed the briefs submitted to the Court by

the parties and counsel is familiar with the issues involved and the scope of

their presentation. Amici respectfully submit that a need exists for additional

argument and briefing regarding the issues in this case.

The proposed Amici Curiae brief attached hereto will assist the Court

in deciding this case because Amici have included a discussion of: (i) the

history of the development of the technology at issue in this case; (ii) the

history of the Constitutional provisions and statutes at issue in this case;

(iii) the impact that emerging technologies will continue to have on the use of

the public rights-of-way by the general public; and (iv) the analytical

framework of the applicable law that is somewhat different from that

contained in the parties’ briefs.

Amici Curiae respectfully request that the Court grant leave to file the

attached amici curiae brief.

Dated: May 4, 2007 DENNIS J. HERRERA City Attorney

BURK E. DELVENTHAL Chief Government Team Deputy THERESA L. MUELLER Chief Energy and Telecommunications Deputy DANNY Y. CHOU Chief Appellate Attorney WILLIAM K. SANDERS Deputy City Attorney By: WILLIAM K. SANDERS Deputy City Attorney Attorneys for Amici Curiae League of California Cities and California State Association of Counties

2

INTRODUCTION

In 1905, the Legislature granted a franchise to “telephone corporations”

allowing them to use the public rights-of-way to construct “telephone lines.”

The Legislature restricted the franchise grant to telephone lines that did not

“incommode the public use of the road or highway.” Over one hundred years

later, this Court must finally decide what the Legislature meant by that

restriction.

The telecommunications industry has changed dramatically since 1905.

At that time, telephone companies were just beginning to develop their

networks. The Legislature granted statewide franchises to these companies to

ensure that this new technology, which the Legislature likely considered to be

essential to the state’s growth, spread throughout California unburdened by

local franchise ordinances or local franchise fees.

In those early days of telephone service, there was little competition

among telephone carriers. Even though independent telephone companies

opened up different markets, they generally enjoyed local monopoly power.

Ultimately, federal and state laws allowed telephone companies to amass

monopoly power throughout the nation. As a result, for nearly 100 years after

the franchise was first granted to telephone corporations only one company

was seeking access to the public rights-of-way in any local jurisdiction so the

impacts from the construction of telephone lines were minimal.

The situation is different today. The United States Department of

Justice broke up the AT&T telephone monopoly. Changes in the law allowed

for competition among landline carriers. New technologies allowed cable

television companies and wireless carriers like plaintiff/appellant Sprint

Telephony PCS L.P. (“Sprint”) to offer telephone services that directly

compete with landline carriers.

3

This competition is often fierce. In order to compete, carriers strive to

offer the best services at the lowest prices. Although good for consumers,

competition has increased the burden on a limited resource that cities and

counties hold in trust for all citizens of the state—the public rights-of-way.

The Court of Appeal correctly held that Public Utilities Code § 7901

does not preempt the County’s authority to regulate the location and

appearance of telephone lines. While § 7901 grants “telephone corporations”

a franchise to use the public rights-of-way, it also restricts the exercise of that

grant by franchised telephone corporations. They may not construct

“telephone lines” that “incommode” the use of the public rights-of-way. As

set forth herein, this Court should construe that restriction to include aesthetic

regulation. Under state law, local governments may exercise their police

power over telephone corporations by enacting local ordinances to enforce the

§ 7901 restriction.

Even though the Court of Appeal entered judgment for the County, it

rejected the County’s argument that Sprint did not construct “telephone lines”

as that term is used in § 7901. In this regard, the Court of Appeal erred. The

broad definition of that term in Public Utilities Code § 233 was intended for

the sole purpose of establishing the jurisdiction of the California Public

Utilities Commission (the “CPUC”) over public utilities serving the state. It

should not be construed to extend the grant in § 7901 itself. In addition,

Sprint does not have a certificate of public convenience and necessity

(“CPCN”) from the CPUC. As a result, Sprint is not a “telephone

corporation” as that term is used in § 7901 and cannot avail itself of the

franchise grant contained therein.

4

STATEMENT OF FACTS

In April 2003, the County amended its Zoning Ordinance to include a

Wireless Siting Ordinance (the “Ordinance”). (Clerk’s Transcript [“CT”] at

pp. 234-50). Among other things, the purpose of the Ordinance was to:

(i) “provide a uniform and comprehensive set of standards for the

development, siting and installation of wireless telecommunications

facilities;” (ii) “promote the public health, safety and welfare of the residents

of the unincorporated areas of San Diego;” (iii) “preserve community

character and protect aesthetic quality;” and (iv) “encourage siting [of

wireless facilities] in preferred locations to minimize the intrusion of these

uses into residential areas.” (CT at p. 234, § 6982.) The Ordinance regulated

the construction of wireless facilities both on private property and in the

public rights-of-way. (See CT at pp. 242-45, §§ 6985(C), 6986.)

The Ordinance included certain “Design Regulations” that were

intended to “minimize the visual impact” of these facilities to the “greatest

extent possible.” (CT at p. 245, § 6987(F).) To that end, the Design

Regulations required wireless carriers: (i) to construct facilities that were

“designed to visually and operationally blend into the surrounding area;”

(ii) avoid constructing facilities on historic buildings or structures or in

historic districts unless such construction would have “no adverse effect on

the appearance of the building or structure or its eligibility for historic

designation;” (iii) “avoid adverse visual impacts” in areas where a facility

would be visible from “Priority Scenic Highways” as that term is defined in

the County’s General Plan; and (iv) integrate façade-mounted antennas into

the building’s design and “otherwise make them as unobtrusive as possible.”

(CT at p. 245, § 6987(B)-(E).)

5

Sprint provides wireless telecommunications services in the State of

California and the County of San Diego pursuant to a license issued by the

Federal Communications Commission (“FCC”). (CT at p. 414, ¶ 1.) To

provide those services, Sprint has constructed wireless facilities throughout

the state including the County of San Diego. (CT at p. 414, ¶ 3.)

The CPUC has not issued Sprint a CPCN. Instead, the CPUC has

issued Sprint a Wireless Identification Registration. (CT at p. 414, ¶ 2.)

HISTORICAL BACKGROUND

California now has two different telephone networks: the landline

network that has been in use since the invention of the telephone and the

wireless network that started to be developed in the 1980s.1 To give context

and meaning to the legal issues in this case, it is helpful to understand the

historical development of these telephone networks and the laws applicable to

the entities that own and operate them.

A. The Development Of The Landline Telephone Network

Alexander Graham Bell invented the telephone in 1876.2 Between

1876 and 1894, the Bell Telephone Company (referred to herein as “AT&T”)

1 In this brief, we use the word “landline” to refer to a “telephone line

that travels through a solid medium, either metal wire or optical fibre.” (Http://en.wikipedia.org/wiki/Landline.) We use the word “wireless” to refer to a “mobile cellular line, where the medium used [to provide the service] is the airwaves.” (Id.)

2 The information contained in this section is derived from: Brotman, Communications Law and Practice (2006), pp 1-19-27; Valle-Riestra Telecommunications, The Governmental Role in Managing the Connected Community (2002), pp. 9-13; Garnet, The Telephone Enterprise, the Evolution of the Bell System’s Horizontal Structure, 1879-1909 (1985), pp. 14-17, 130-31, Maps 1,2; and AT&T: A Brief History (www.corp.att.com/ history/history1.html).

6

dominated the telephone industry because of its patents on the telephone.3

Initially, AT&T did not own any of the infrastructure used to provide

telephone service. Instead, AT&T licensed local agents to use its patented

technology to offer telephone service.

After AT&T’s patents expired, competition in the industry exploded.

By 1904, there were over 6,000 carriers offering telephone service in the

United States. Until 1913, none of these carriers could interconnect with each

other. At that time, AT&T entered into an agreement with the United States

government, part of which required AT&T to interconnect competing

telephone companies to its network.

Beginning in 1899, AT&T started to acquire many of these

independent telephone carriers. AT&T’s efforts to create a telephone

monopoly were generally supported by regulators because: (i) they deemed

telephone service to be a “natural” monopoly; and (ii) they believed that it

would lower the costs of providing service. Because of its monopoly power,

AT&T’s provision of services and rate of return were subject to regulation

under federal law (for interstate long distance services) and state law (for local

service and intrastate long distance services). By 1934, when Congress

enacted the federal Communications Act, AT&T and its affiliated companies

were responsible for 94.3% of all local telephone calls.

3 The Bell Telephone Company later became AT&T. When the

United States Department of Justice broke up that company in 1984, AT&T provided long-distance telephone services and the local telephone market was divided up among newly formed separate companies that had been part of AT&T. The company that today is called AT&T resulted from an acquisition of AT&T by SBC (one of the local telephone companies). AT&T now provides both local and long-distance telephone service in many states including California.

7

The era of competition in the provision of telephone service began in

1969 when the FCC approved MCI’s petition to provide private line service

between Chicago and St. Louis via microwave relay. The long-distance

telecommunications market became more competitive after the United States

Department of Justice settled an antitrust suit against AT&T in 1984, resulting

in divestiture of the company. The enactment of the Telecommunications Act

of 1996 further opened the doors to competition in the local and long-distance

telephone markets.

Expanding competition lead to the demise of rate regulation. Just last

year, the CPUC ended retail telephone rate regulation in California. (See

Order Instituting Rulemaking on the Commission’s Own Motion to Assess and

Revise the Regulation of Telecommunications Utilities Decision (2006)

Decision No. 06-08-030, 2006 Cal. PUC LEXIS 367.) The CPUC determined

that rate regulation was no longer necessary because the market was fully

competitive and that “competitive forces” would “produce ‘just and

reasonable’ rates for California’s telephone consumers.” (Id. at p. *1.) B. The Development Of The Wireless Telecommunications

Network

Gugliemlo Marconi invented the wireless telegraph in 1896 and speech

was first transmitted over a radio wave in 1906.4 In 1920, Pacific Telephone

4 The information in this section is derived from: Galambos and Abramson, Anytime, Anywhere, Entrepreneurship and the Creation of a Wireless World (2002), pp. 23-33; Berresford, The Impact of Law and Regulation on Technology: The Case History of Cellular Radio (1989) 44 Bus. Lawyer 721; Shea, Brief History of Wireless Communications (Jan. 12, 2002) (http://wireless.ece.ufl.edu/~jshea/eel6509/misc/history.html); 1946: First Mobile Telephone Call (http://www.corp.att.com/attlabs/ reputation/timeline/46mobile.html); and Bellis, Selling The Cell Phone: History of Cellular Phones (http://inventors.about.com/library/weekly/ aa070899.htm).

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built the first commercial radio telephone service on Santa Catalina Island (off

the coast of Los Angeles).

In 1946, the first mobile telephone call to the public switched telephone

network was made. By 1948, AT&T was making wireless services available

in 100 cities and highway corridors. In 1949, the FCC recognized mobile

radio service as a new class of telecommunications service and started

allocating radio frequencies for this purpose. (See General Mobile Radio

Service, Report and Order of the Commission (1949) 13 F.C.C. 1190.)

In the late 1960s, AT&T began to develop the “cellular” system that it

had first invented in the 1940s. That system, which is still in use today,

allows wireless carriers to re-use their allotted radio frequencies by building

their networks in “cells” each covering a few miles (rather than building a

single tower covering a much larger area). The development of cellular

technology vastly increased the capacity of cellular networks. Still, in 1965

capacity remained so limited that AT&T rationed the service to 40,000

subscribers guided by agreements with state regulatory agencies.

In the 1970s, the FCC allocated additional radio frequencies for mobile

communications. The wireless telecommunications services that are prevalent

today first became available in 1976 when AT&T introduced the service to a

limited number of customers in the New York City area. Even though the

service was poor and the telephones unwieldy, AT&T had a long waiting list

of customers.

Since then, wireless technology has rapidly evolved, the spectrum

available to provide wireless services has been expanded, and the industry has

grown exponentially. According to the Cellular Telecommunication Industry

Association (“CTIA”), in June 1985 there were 203,600 wireless subscribers

in the United States. (CTIA Semi-Annual Wireless Industry Survey (2006)

9

[http://files.ctia.org/pdf/CTIA_Survey_Year_End_2006_ Graphics.pdf].) By

the end of 2006, that number had grown to 233,040,781. (Id.) The annual

revenues of wireless carriers over that same time period increased from $482

million to $125 billion. (Id.)

As the number of wireless customers and the services available on

wireless telephones increased (i.e. email and Internet access), so too has the

demand for wireless carriers to build new facilities to serve their customers

and provide those services. For years, wireless carriers built base stations on

large towers or rooftops.5 In recent years, however, wireless technology has

evolved. Now, in addition to building base stations on private property

wireless carriers seek to expand their coverage and increase their capacity by

installing antennas on existing utility poles or light poles in the public rights-

of-way or by constructing new poles on public rights-of-way where there are

no utility poles because the other utility facilities have been undergrounded.

C. The Regulation of Telephone Corporations In The State Of California

In 1850, the Legislature granted a franchise to construct “lines of

telegraph along and upon any public roads and highways” throughout the

state. (Stats. 1850, ch. 128, § 150, p. 369 [repealed].) The only restriction on

the franchise right granted to telegraph corporations was that telegraph lines

could not “incommode the public use of the said roads or highways.” (Id.)

5 For example, Verizon Wireless has provided wireless service in San

Francisco for over twenty years using facilities built entirely on private property. (GTE Mobilnet of California L.P. v. City and County of San Francisco (N.D. Cal, Feb. 6, 2007) 2007 WL 420089, at p. *1.) Without using the public rights-of-way, Verizon Wireless is able to serve tens of thousands of customers in San Francisco from which it earns tens of millions of dollars in revenues annually. (Id.)

10

In 1857, the Legislature made minor changes in the language. (Stats.

1857, ch. 147, § 1, p. 171 [repealed].) In 1872, the Legislature repealed the

law and reenacted it as Civil Code § 536 (repealed). To keep up with

technological developments, in 1905 the Legislature amended Civil Code

§ 536 to extend the franchise grant to “telephone corporations” constructing

“telephone lines.” (Stats. 1905, ch. 385, p. 492 [repealed].)

In 1911, the people of the state of California amended the California

Constitution to establish the CPUC (then called the Railroad Commission).

(Cal. Const., art. XII, § 23 [repealed].)6 This new provision vested in the

Legislature the “plenary” authority to “confer” on the CPUC the “power and

jurisdiction” to “supervise and regulate” public utilities and to “fix the rates to

be charged for the commodities furnished.” (Id.) Consistent with that

authority, the Legislature enacted the Public Utilities Act. (Stats. 1911, Extra

Sess., ch. 14, pp. 18-64 [repealed].)7

Among other things, the Public Utilities Act required a telephone

corporation seeking to construct telephone lines to obtain from the CPUC a

“certificate that the present or future public convenience and necessity require

or will require such construction.” (Public Utilities Act § 50(b) (Stats. 1911,

Extra Sess., ch. 14, p. 43) [repealed].) With the enactment of the Public

Utilities Act, the requirement that a telephone corporation obtain a CPCN

became a “condition precedent to the construction or extension of the plant or

6 A similar provision is still in the Constitution. (Cal. Const., art. XII,

§ 5.) 7 In 1915, the Legislature enacted a new version of the Public Utilities

Act. (Stats. 1915, ch. 91, pp. 115-69 [repealed].) The 1915 version was intended as a “continuation” of the 1911 version. (See id. at § 82(d), p. 169.) The language in the above-quoted sections was not changed.

11

line of a public utility.” (Oro Electric Corp. v. Railroad Commission (1915)

169 Cal. 466, 475 [“Oro Electric”].) 8

The Public Utilities Act also required that all rates charged by a public

utility be “just and reasonable.” (Public Utilities Act § 13(a) (Stats. 1911,

Extra Sess., ch. 14, p. 25) [repealed].) The Public Utilities Act also defined

the terms “telephone line” and “telephone corporation.” (Public Utilities Act

§ 2(s), § 2(t) (Stats. 1911, Extra Sess., ch. 14, p. 21) [repealed].)

Despite the powers granted to the CPUC, the Legislature intended that

local governments retain the authority to regulate the activities of public

utilities. In 1915, the Legislature enacted a new law to provide that cities and

counties may not “surrender” to the CPUC their “powers of control to

supervise and regulate the relationship between a public utility [including a

telephone corporation] and the general public in matters affecting the health,

convenience and safety of the general public, including matters such as the

use and repair of public streets by any public utility [and] the location of

poles, wires, mains or conduits of any public utility.” (Stats. 1915, ch. 646,

§ 1, pp. 1273-74 [repealed].)

In 1951, the Legislature repealed the Public Utilities Act and enacted

the Public Utilities Code. (Stats. 1951, ch. 764, pp. 2025-258.) The Public

Utilities Code retained the requirement that a public utility, which included a

telephone corporation, obtain a CPCN. (Pub. Util. Code § 1001.) The Public

Utilities Code also retained the definition of the terms “telephone line” and

“telephone corporation” that first had been in the Public Utilities Act (Pub.

8 In granting an application for a CPCN, the CPUC is making a finding

that the “general public will be advanced by the prosecution of the enterprise which it is proposed to carry on for the service of the public.” (Oro Electric, supra, 169 Cal. at p. 475.)

12

Util. Code §§ 233, 234), and the provision enacted in 1915 recognizing local

authority to regulate public utilities (Pub. Util. Code § 2902). The Public

Utilities Code also now contained the franchise grant to telephone

corporations that since 1905 had been contained in the Civil Code. (Pub. Util.

Code § 7901.)9 The language in § 7901 is unchanged from Civil Code § 536

and, except for the addition of the terms “telephone corporation” and

“telephone line,” is in essence the same language that has been part of

California law since 1850.

Consistent with its broad jurisdiction over telephone corporations, after

the development of wireless technology the CPUC required entities operating

“radiotelephone” systems to obtain CPCNs before constructing their facilities.

(See, e.g., Robert C. Crabb (Mt. Shasta Radiotelephone Co.) Authorized to

Operate Radiotelephone Utility in Mt. Shasta and Environs (1970) Decision

No. 77573, 1970 Cal. PUC LEXIS 932.) As the CPUC held: “P.U. Code §

1001 confers upon this Commission jurisdiction to certificate radiotelephone

utilities, a class of telephone corporation, and to authorize the construction of

their systems and extensions thereof.” (In the Matter of the Application of

Orange County Radiotelephone Service, Inc. (1986) Decision No. 86-12-094,

9 Section 7901 provides:

Telegraph or telephone corporations may construct lines of telegraph or telephone lines along and upon any public road or highway, along or across any of the waters or lands within this State, and may erect poles, posts, piers, or abutments for supporting the insulators, wires, and other necessary fixtures of their lines, in such manner and at such points as not to incommode the public use of the road or highway or interrupt the navigation of the waters.

13

1986 Cal. PUC. LEXIS 873, at p. *11.) The CPUC determined that a

radiotelephone utility was a telephone corporation under state law and could

not offer services in the state without a CPCN. (See Radio Electronic

Products Corp. v. Paul E. Boer (1972) Decision No. 79799, 1972 Cal. PUC

LEXIS 790, at p. *13.)

The CPUC’s authority to require wireless carriers to obtain CPCNs was

changed in 1993 when Congress amended the Communications Act to

preempt state regulation over the “entry of and rates charged by” wireless

carriers. (47 U.S.C. § 332(c)(3)(A).) After the Legislature amended the

Public Utilities Code to provide that any provision of state law “in conflict”

with § 332(c)(3) “shall not apply to commercial mobile radio service to the

extent of that conflict” (Pub. Util. Code § 247), the CPUC determined that

federal law preempted the requirement that a wireless carrier obtain a CPCN

in order to provide telephone service. (Investigation on the Commission’s

Own Motion into Mobile Telephone and Wireless Communications (1998)

Decision No. 98-07-037, 1998 Cal. PUC LEXIS 339 (“Mobile Telephone”), at

p. *4; see GTE Mobilnet of California, L.P. v. City and County of San

Francisco (N.D. Cal. 2006) 440 F.Supp.2d 1097, 1107 [in light of § 332(c)(3),

the CPUC “ruled that it no longer had authority to issue CPCNs to wireless

carriers because it no longer possessed the ability to authorize wireless

carriers to operate in California”].) As a result, rather than requiring wireless

carriers to obtain CPCNs the CPUC now only requires them to register with

the CPUC. (Mobile Telephone, 1998 Cal. PUC LEXIS 339, at p. *2.) D. The Continuing Need To Build And Maintain Landline

Facilities

Sprint claims that the demand for overhead telephone lines, and

therefore the “impacts on the environment” from the construction of these

14

facilities will decrease as more households abandon their landline telephones

for wireless telephones. (Sprint’s Opening Brief on the Merits [“Sprint

Brief”] at pp. 4-5.) That claim is wrong for at least four reasons.

First, despite the growth in wireless services, business and residential

customers will continue to rely on landline service for the foreseeable future.

According to the FCC, in 2005 there were over 175,000,000 landline

telephones lines in use in the United States (over 20 million in California).

(FCC Report, Trends in Telephone Service (February 2007) Tables 7.1, 7.2 at

pp. 7-3, 7-5 [http://www.fcc.gov/wcb/iatd/trends.html].) According to the

United States Census Bureau, in 2003 landlines still served 94.1% of all

households in the United States. (Dart, Americans hanging up on landlines

(April 13, 2007) [www.ajc.com/search/content/news/stories/2007/04/16/

0413natphones.html].) A recent study concluded that in 2010 businesses in

the United States will still have 44 million landlines (down from 55 million

today). (Brown, Letting Go of Your Landlines [http://technology.inc.com/

telecom/articles/200609/landlines.html].)

Second, these landline facilities are not used solely to provide

telephone service. Californians increasing rely on landline facilities to obtain

broadband services at their homes and places of business. In 2005, nearly

50% of a total of over seven million broadband connections in California were

from digital subscriber line service offered by local exchange carriers through

their existing telephone lines and other infrastructure, while less than seven

percent were from mobile wireless connections. (See California Public

Utilities Commission Broadband Report (Sept. 2006 update), Chart VI at p.7

[http://www.cpuc.ca.gov/static/telco/reports/broadbandreports.htm].)

Third, telephone companies are not the only companies constructing

landline facilities in the public rights-of-way. Cable television companies also

15

use fiber-optic facilities constructed in the public rights-of-way to provide

their services. In addition to using these facilities to provide cable television

service, in 2005 nearly 40% of the broadband connections in California were

from cable modem service offered by cable television companies. (See Id.)

Moreover, cable television companies are increasingly using their facilities to

provide competing telephone services. (See Perez, Cable VoIP Market Set to

Surge (Aug. 4, 2006) [http://www.voip-news.com/news/cable-voip-market-

report-080406/].)

Fourth, even with declining revenues from telephone services the

incumbent telephone companies are not abandoning their landline facilities.

Instead, to compete in today’s market these carriers are upgrading those

facilities to expand the types of services offered to their customers. AT&T

and Verizon, the largest landline carriers in California, already offer high-

speed Internet access. These companies are now using their landline facilities

in California to offer video services under a new state law granting them state

franchises for this purpose. (Pub. Util. Code § 5800, et seq.; see Haugsted,

Calif. OKs Statewide-Franchise Rules Public Utilities Commission, Ruling

Cheered by Verizon, Booed by Consumer Groups, Municipalities, (Mar. 2,

2007) [http://www.multichannel.com/article/CA6421022.html?

display=Breaking+News].)10 In order to do so, they will spend billions of

dollars to upgrade their existing landline facilities. (See Hu, SBC to invest $4

billion in fiber upgrade (Nov. 11, 2004) [http://news.com.com/SBC+to+

invest+4+billion+in+fiber+upgrade/2100-1034_35449219.html? tag= item];

Upbin, Verizon’s $18 Billion Gamble (Jan. 9, 2007) [http://www.forbes.com/

10 The CPUC has already granted state video franchises to AT&T and Verizon, among others. (See http://www.cpuc.ca.gov/static/hottopics /2telco/videofranchising.htm.)

16

technology/2007/01/09/fios-fiber-broadband-tech-media-cz_bu_0109ces-

verizon.html].) AT&T’s and Verizon’s new infrastructure will include large

utility boxes in the public rights-of-way. (See The Telco TV Boxes Are

Coming! [http://saveaccess.org/telcobox].)

LEGAL DISCUSSION I. PUBLIC UTILITIES CODE § 7901 DOES NOT PREEMPT THE

COUNTY ORDINANCE.

In enacting Public Utilities Code § 7901 and its precursors the

Legislature intended to preempt certain types of local regulation of telegraph

and telephone corporations—namely the granting of franchises and the

imposition of franchise fees. But the Legislature did not intend to preempt

local government authority to regulate the use of the public rights-of-way by

franchised telegraph and telephone corporations. As the Court of Appeal

correctly held, this authority extends to the “location and appearance of

equipment eligible to be installed in the public rights-of-way.” (Court of

Appeal Opn. at p. 20.)

Sprint argues that the scope of preemption is broader. According to

Sprint, local governments may only regulate the “time, place, and manner of

installation of telecommunications facilities to ensure that those facilities do

not unreasonably obstruct or interfere with the public’s right-of-way use.”

(Sprint Brief at p. 28, emphasis added.) To the contrary, as the County has

shown, the “plain language” of § 7901 reveals otherwise. (County of San

Diego Answer Brief on the Merits [“County Brief”] at pp. 22-23.) A. The Scope Of Preemption Is A Matter Of Statutory

Construction.

In considering the preemptive effect of a state statute, this Court’s

primary task is to determine the intent of the Legislature. (Brown v. Kelly

17

Broadcasting Co. (1989) 48 Cal.3d 711, 724.) In so doing, the Court must

“turn first to the statutory language, since the words the Legislature chose are

the best indicators of its intent.” (Big Creek Lumber Co. v. County of Santa

Cruz (2006) 38 Cal.4th 1139,1152 [“Big Creek Lumber”].) The Court must

“construe the words of the statute in their context and harmonize them

according to their ordinary, common meaning.” (Friedman v. City of Beverly

Hills (1996) 47 Cal.App.4th 436, 441.) If statutory language can be construed

in more than one way, this Court must “choose the one which most comports

with the intent of the Legislature.” (Id.) In a case such as this, involving an

interpretation of statutes enacted long ago, this Court must maintain its “usual

deference to the Legislature in such matters and ask . . . first how that body

would have handled the problem if it had anticipated it.” (People v. Butler

(1996) 43 Cal.App.4th 1224, 1229.) B. Section 7901 Does Not Preempt Local Laws Regulating The

Use Of The Public Rights-Of-Way By Telephone Corporations.

A “county or city may make and enforce within its limits all local,

police, sanitary, and other ordinances and regulations not in conflict with

general laws.” (Cal. Const., art. XI, § 7.) An otherwise valid local law is

preempted, therefore, only when it “conflicts with state law.” (Sherwin-

Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897, internal

quotation marks omitted.)

Such a conflict between state and local exists only where the local law

at issue: (i) is duplicative of state law because it is “coextensive therewith;”

(ii) is contradictory to state law because the local law is “inimical thereto;” or

(iii) invades an area that the Legislature has expressed an intent to fully the

area. (Id. at pp. 897-98.) An intent by the Legislature to occupy the field can

be implied only if, as relevant in this case: (i) “the subject matter has been so

18

fully and completely covered by general law as to clearly indicate that it has

become exclusively a matter or state concern;” or (ii) “the subject matter has

been partially covered by general law couched in such terms as to indicate that

a paramount state concern will not tolerate further or additional local action.”

(Id., internal quotation marks omitted.)

Under California law there is a presumption against preemption “when

local government regulates in an area over which it traditionally has exercised

control.” (Big Creek Lumber Co., supra, 38 Cal.4th at p.1149, internal

quotation marks omitted.) As this Court recently held, courts should be

“reluctant to infer legislative intent to preempt a field covered by municipal

regulation when there is a significant local interest to be served that may differ

from one locality to another.” (Id., internal quotation marks omitted.)

Furthermore, where “there is an apparent conflict between two statutes, the

courts will attempt to harmonize them by giving effect to both statutes if

possible.” (San Diego Gas & Elec. Co. v. City of Carlsbad (1998) 64

Cal.App.4th 785, 793 [“SDG&E”].)

With these principles in mind, this Court should find that the

preemptive effect of § 7901 does not extend to the County’s reasonable

regulation of Sprint’s use of the public rights-of-way, including regulating the

location and appearance of Sprint’s wireless facilities. Section 7901 is a

“continuing offer” to telephone corporations which, when “accepted by the

construction and maintenance of telephone lines gives a franchise from the

state to use the public highways for the prescribed purposes without the

necessity for any grant by a subordinate legislative body.” (See generally

Pacific Tel. & Tel. Co. v. City and County of San Francisco (1959) 51 Cal.2d

766, 771, internal quotation marks and citation omitted [City of San

Francisco].)

19

Preemption under § 7901, therefore, must be confined to the scope of

the grant made to telephone corporations. Specifically, § 7901 only prohibits

local governments from excluding a telephone company from “use of its

streets” or from “exacting compensation for such use.” (Western Union Tel.

Co. v. Hopkins (1911) 160 Cal. 106, 118 [Hopkins]). As this Court has held,

the “authority to grant a franchise to engage in the telephone business resides

in the state, and the city is without power to require a telephone corporation to

obtain such a franchise unless the right to do so had been delegated to it by the

state.” (Pacific Tel. & Tel. Co. v. City of Los Angeles (1955) 44 Cal.2d 272,

279-80 [City of Los Angeles].) In other words, § 7901 prohibits local

governments from “control[ling] the right” of telephone corporations “to do a

telephone business.” (Id. at 279.) Section 7901 does not preempt local

authority to regulate the use of the public rights-of-way by telephone

corporations.

It is undisputed that Sprint is providing wireless services in the County

of San Diego. The County did not require Sprint to either obtain a franchise

or pay franchise fees for the privilege of providing wireless services. Nor did

the County, simply by enacting the Ordinance, attempt to exclude Sprint from

using the public rights-of-way to construct facilities to improve its existing

wireless services there.11 Instead, the County has attempted to impose

reasonable regulations on Sprint’s use of the public rights-of-way to construct

its wireless facilities. (See Hopkins, supra, 160 Cal. at p. 118 [the state has

the “original right to control the streets and highways, . . .except in so far as

that control is relinquished to municipalities”].)

11 This case concerns a facial challenge to the Ordinance. There is no evidence in the record here to suggest that the County has enforced the Ordinance in such a manner as to exclude such facilities.

20

As a result, this Court should affirm the Court of Appeal and uphold

the Ordinance. The Ordinance neither duplicates § 7901 nor contradicts

it. Moreover, the statutory language does not reveal any intent by the

Legislature to fully or partially occupy the field of local regulation over the

use of the public rights-of-way by telephone corporations. Indeed, the case

law, administrative decisions and the expression of legislative intent that can

be gleaned from subsequently enacted legislation are to the contrary.

As a Court of Appeal explained long ago: Where a corporation has a state franchise to use a city’s streets [to construct telephone lines], the city derives its rights to regulate the particular location and manner of installation of the franchise holder’s facilities from the narrower sense of the police power. Thus, because of the state concern in communications, the state has retained to itself the broader police power of granting franchises, leaving to the municipalities the narrower police power of controlling location and manner of installation.

(Pacific Tel. & Tel. v. City and County of San Francisco (1961) 197

Cal.App.2d 133, 152, emphasis added.) Here, the County did not encroach on

the broad police power reserved to the state to grant franchises that would

enable telephone corporations to telephone service. Instead, the County

properly exercised the narrow police power to regulate the location and

manner in which a telephone corporation can construct its telephone lines.

The CPUC has broadly construed local government authority to

regulate use of the public rights-of-way by telephone corporations: Municipal corporations are expressly authorized not to surrender the power to supervise and regulate the relationship between such public utilities and the general public “in matters affecting the health, convenience, and safety of the general public, including matters such as the use and repair of public streets by any public utility, the location of the poles, wires, mains, or conduits of any public utility, on, under, or above any public streets.”

21

(Order Instituting Rulemaking on the Commission’s Own Motion into

Competition for Local Exchange Service (1998) Decision No. 98-10-058,

1998 Cal. PUC LEXIS 879, at p. *57 (quoting Pub. Util. Code § 2902).) The

CPUC has also recognized that, in adopting General Order No. 159A in 1996

(Rules Relating to the Construction of Commercial Mobile Radio Service

Facilities in California), the CPUC had “ceded” regulatory authority over

wireless facilities siting to local governments despite the CPUC’s “interest in

promoting development of wireless technologies and its duty to protect

ratepayers.” (Id.; see Rulemaking on the Commission’s Own Motion to

Develop Revisions to General Orders and Rules Applicable to Siting and

Environmental Review of Cellular Mobile Radiotelephone Utility Facilities

(1996) Decision No. 96-05-035, 1996 Cal. PUC LEXIS 288.) As the

administrative agency charged with regulating public utilities, the CPUC’s

interpretation of the Public Utilities Code is entitled to great weight. (Golden

Gate Scenic Steamship Lines, Inc. v. Public Utilities Commission (1962) 57

Cal.2d 373, 377.)

The Legislature has similarly recognized the broad authority of local

governments to regulate the use of public rights-of-way by telephone

corporations. In 1996, the Legislature amended the Government Code to

prohibit local governments from imposing on telephone corporations any

“permit fee” for installing “telecommunications facilities” that “exceed[s] the

reasonable costs of providing the service for which the fee is charged” or that

was “levied for general revenue purposes.” (Gov. Code § 50030.) When it

considered the bill, the Legislature noted that: (i) “[t]elephone companies have

a state franchise to place telephone poles and lines in public rights of way;”

(ii) local governments may not impose “fees on telephone corporations for the

use of public rights-of-ways;” and (iii) local governments “can still control the

22

location of telephone lines.” (Assem. Com. on Local Government, Rep. on

Senate Bill No. 1896 (1995-1996 Reg. Sess.) (June 19, 1996), pp. 1-2.)

While not binding on this Court, the Legislature’s subsequent

“expression of the intent of an earlier act . . . may properly be considered

together with other factors in arriving at the true legislative intent existing

when the prior act was passed.” (Eu v. Chacon (1976) 16 Cal.3d 465, 470.)

These recent statements from the Legislature affirm that in § 7901 and its

precursors the Legislature intended to preempt only those local ordinances

that attempt to require telegraph or telephone corporations to obtain local

franchises or pay franchise fees for the privilege of using the public rights-of-

way to construct their lines. The County here did neither of those things.

For these reasons, the Court should affirm the decision of the Court of

Appeal and find that § 7901 does not preempt the County Ordinance.

II. THE RESTRICTION ON A TELEPHONE CORPORATION’S EXERCISE OF ITS FRANCHISE RIGHTS CONTAINED IN § 7901 SHOULD BE CONSTRUED IN FAVOR OF LOCAL GOVERNMENTS.

When the Legislature enacted § 7901 and its precursors to preempt

local government authority to require telephone corporations to obtain

franchises and pay franchise fees, the Legislature restricted the exercise of the

franchise grant by prohibiting the construction of telephone lines that could

“incommode the public use of the road or highway.” Under California law,

the extent of local authority under such a grant should be construed in favor of

local governments. (Civ. Code § 1069 (“every grant by a public officer or

body, as such, to a private party, is to be interpreted in favor of the grantor”).

As this Court has held: Only that which is granted in clear and explicit terms passes by a grant of property, franchises, or privileges in which the government has an interest. Statutory grants of that character are to be construed strictly in favor of the

23

public, and whatever is not unequivocally granted is withheld.

(Sunset Tel. & Tel. Co. v. City of Pasadena (1911) 161 Cal. 265, 274, internal

quotation marks omitted [“Sunset Tel. & Tel.”].) That rule has special

application here. If the restriction in the grant to telephone corporations was

narrowly construed, it would improperly impair the authority to regulate use

of the public rights-of-way that has been delegated by the state to local

governments. (See Proctor v. San Francisco Port Authority (1968) 266

Cal.App.2d 675, 683 [“Any statute that grants a special privilege is to be

strictly construed against the grantee, particularly where such privilege is one

in derogation of the rights of the sovereign.”].)

As previously noted, the scope of the restriction on a telephone

corporation’s exercise of its franchise rights is a question of legislative intent,

the best evidence of which is the statutory language. (See pp. 17-18, supra,)

Because the term “incommode” has defined the scope of the restriction since

1850, this Court must consider how that term was defined at that time.

(People v. Williams (2001) 26 Cal.4th 779, 785.)

The 1828 edition of Webster’s Dictionary defined the term as follows:

“To give inconvenience to; to give trouble to; to disturb or molest in the quiet

enjoyment of something, or in the facility of acquisition. It denotes less than

annoy, vex or harass.”12 Based on that definition, this Court should find that

local authority under § 7901 is broad enough to encompass aesthetic

regulation. Wireless facilities that create visual blight could be just as vexing

or annoying to local residents as are those that obstruct travel.

12 This definition can be found at: http://65.66.134.201/cgi-

bin/webster/webster.exe?search_for_texts _web1828=incommode.

24

In attempting to discern what the Legislature meant by the word

“incommode,” both in 1850 to describe the franchise grant to telegraph

corporations, and then in 1905 to describe the grant to telephone corporations,

this Court should also consider the Legislature’s reasons for enacting this

legislation and its expectations as to the impact the construction of telegraph

and telephone lines would have on the public rights-of-way.

In 1850, when the franchise grant was offered only to telegraph

corporations, the telegraph was both new and the only form of electronic

communication available. Clearly, the purpose of the legislation was to

enable telegraph corporations to build their networks throughout the state

without having to obtain local franchises or pay franchise fees. Unlike

modern telephone networks, which serve individual residences and

businesses, telegraph networks connected only telegraph offices around the

nation and the state. Telegraph messages were either picked up at the

telegraph office or delivered. Thus, in 1850 the Legislature could not have

considered all the impacts that building modern telephone networks with their

ubiquitous facilities would have on local communities. Nevertheless, the

Legislature was concerned enough to leave intact the regulatory power of

local governments to ensure that the telegraph lines would not incommode the

public.

In 1905, when the legislature amended the statute to include telephone

corporations, its purpose was similar—to enable telephone corporations to

make their networks available throughout the state. At that time, telephone

networks were just being built and there were few if any communities in

California where services were available from multiple providers. Again, the

Legislature deemed it important to leave intact the ability of local

governments to ensure that such networks would not incommode the public.

25

Given that the Legislature recognized the potential disturbance caused

by such construction on the quiet enjoyment of the public rights-of-way in an

era where such construction appeared minimal, and felt the need to preserve

local authority to address such disturbances, this Court should construe the

Legislature’s use of the word “incommode” broadly to include aesthetic

regulation. Indeed, the need for such authority is especially important today

where communities are served by numerous telephone corporations offering

both landline and wireless services, all of which are constructing their

facilities in the public rights-of-way. Likewise, the other demands (and

attendant visual clutter) for access to the public rights-of-way is far greater

today in light of the need for traffic lights, streetlights, trash receptacles, news

racks, parking meters and signage, transit facilities including bus shelters and

benches, electrical and cable television facilities, etc., let alone the legal

requirement to make the public rights-of-way accessible to persons with

disabilities.

Such an interpretation is well supported by the only decision by this

Court considering the meaning of the word “incommode.” (See Western

Union Tel. Co. v. City of Visalia (1906) 149 Cal. 744 [“City of Visalia”].)

That case, decided over 100 years ago, concerned a franchise granted to a

telegraph corporation. The plaintiff had constructed telegraph lines in an area

that subsequently became Visalia but before its incorporation. (Id. at p. 747.)

Following its incorporation, Visalia passed an ordinance imposing certain

conditions on the plaintiff’s use of the public rights-of-way, including that:

(i) any poles and wires “be placed and maintained so as not to interfere with

travel” on “alleys and public ways;” and (ii) any poles constructed “within

city limits” be of the “uniform height of twenty-six feet above the surface of

the ground.” (Id. at pp. 747-48.)

26

After finding that the plaintiff had a right under § 536 to a statewide

franchise as a telegraph corporation, this Court went on to find that § 536 did

not preempt a city ordinance regulating the plaintiff’s construction of facilities

necessary to provide telegraph service: [T]he city had the authority, under its police power, to so regulate the manner of plaintiff’s placing and maintaining its poles and wires as to prevent unreasonable obstruction of travel. And we think that the ordinance in question was not intended to be anything more, and is nothing more, than the exercise of this authority to regulate. But such regulation is not the granting of a franchise; it is a restriction of and burden upon a franchise already existing; it is not an original and affirmative granting of anything in the nature of a franchise.

(Id. at pp. 750-51, emphasis added; see also City of Los Angeles, supra, 44

Cal.2d at pp. 280-81 [cities may exercise their “police powers” to regulate

telephone corporations].)

In so holding, this Court correctly found that obstructing travel could

incommode the public’s use of the public rights-of-way. Nonetheless, nothing

in City of Visalia should be construed as limiting local government authority

to enforce the restriction and burden on the grant to telephone corporations

under § 7901 to the prevention of obstructions. Rather, that decision must be

viewed in light of the facts of the case. The local ordinance specifically

referred to “interfer[ring] with travel.” It must also be construed in the

context of the times, when the telegraph was still the primary form of

electronic communications in the state and the impact the construction of

relatively few telegraph lines on local communities was minimal. In any

event, despite this Court’s reference to obstructing travel this Court upheld the

ordinance’s 26 foot height restriction. Such a restriction could not in any way

be related to obstructing travel and certainly could be construed to have

addressed aesthetic concerns among other considerations.

27

For these reasons, the Court of Appeal correctly construed City of

Visalia to authorize local governments to exercise their “police power over the

location and appearance” of telephone lines without running afoul of the

“franchise conferred by section 7901.” (Court of Appeal Opn. at p. 20.) In

2007, the clutter of telephone lines that, because of their appearance, prevent

local residents from enjoying the use of their streets present just as much of an

inconvenience as did telegraph lines in 1906 that were higher than 26 feet. As

the Court of Appeal properly held, a local regulation of this kind imposed on a

telephone corporation is not an “invalid arrogation of the power reserved to

the state . . . to grant a franchise.” (Id.)

Indeed, local government authority in this area is virtually undisputed.

In City of San Francisco, this Court discussed certain local regulations

concerning the plaintiff’s construction of its facilities in the public rights-of-

way. (See City of San Francisco, supra, 51 Cal.2d at pp. 773-74.) This Court

noted that, under the city’s Public Works Code, the city could control the

“location of and manner in which all public utility facilities, including

telephone lines, are constructed in the streets.” (Id. at p. 773.) This Court

further noted that the city could require the plaintiff to apply for permits that

required the plaintiff to “show the location and approximate area of each

excavation.” (Id. at p. 774.)

A number of state statutes enacted since 1905 provide further support

for this construction of § 7901. Both in 1915 and in 1951, the Legislature

recognized that state law had vested in “municipal corporations” the authority

to regulate public utilities under the CPUC’s jurisdiction with respect to

“matters affecting the health, convenience, and safety of the general public.”

(Pub. Util. Code § 2902; Stats. 1915, ch. 646, § 1, pp. 1273-74 [repealed].)

This authority included “the location of poles, wires, mains, or conduits of any

28

public utility, on, under, or above any public streets.” (Id.) Consistent with

its duty to harmonize § 7901 and § 2902 (SDG&E, supra, 64 Cal.App.4th at

793), this Court should construe the word “incommode” in § 7901 to include

restrictions on the location and appearance of telephone lines in order to

protect the health, convenience, and safety of the general public.13

Further support for this construction can be found in statements made

by the Legislature in 1996 when it amended the Public Utilities Code to

provide that, “consistent with § 7901” local governments may regulate the

“time, place, and manner in which roads, highways, and waterways are

accessed.” (Pub. Util. Code § 7901.1(a), emphasis added.) The legislature

did not intend § 7901.1 either to codify the restriction in the franchise grant

contained in § 7901, or to in any way limit local government authority to

regulate a telephone corporation’s use of the public rights-of-way. Instead,

the legislature intended § 7901.1 to broaden local authority to regulate these

entities to include construction activities.

As the legislative history indicates, after the Telecommunications Act

of 1996 opened local telephone service to competition, local governments had

expressed concerns that under § 7901 they might not have the authority to

regulate construction activities by telephone corporations because such

13 Sprint asserts that § 2902 cannot “abridge the rights” conferred to telephone corporations under § 7901 because § 2902 was enacted “long after” § 7901. (Sprint Brief at p. 45.) Sprint’s argument is factually wrong. The precursor to § 2902 was enacted in 1915. (See p. 12, supra). It also misses the point for two reasons. First, the Legislature may enact new laws that affect the rights of telephone corporations that have yet to “accept” the offer contained in § 7901, because they do not have vested rights. (See Postal Telegraph-Cable, infra, 200 Cal. at p. 473.) Second, in § 2902 the Legislature did not abridge any vested rights. It simply recognized that local governments have broad authority to regulate use of the public rights-of-way by telephone corporations, even those that claim to have vested rights.

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temporary inconveniences might not incommode the use of the public rights-

of-way. (See Sen. Rules Com., Office of Senate Floor Analyses, Analysis of

Sen. Bill 621 (1995-1996 Reg. Sess.) (Aug. 31, 1995), p. 3, emphasis added

[“Telephone corporations . . . sometimes tak[e] the extreme position that cities

have absolutely no ability to control construction.”].) The Legislature enacted

§ 7901.1 to “bolster the cities’ abilities with regard to construction

management and to send a message to telephone corporations that cities have

authority to manage their construction, without jeopardizing the telephone

corporations’ statewide franchise.” (Id. at p.4, emphasis added.)

Thus, the Legislature intended § 7901.1 to expand local authority, not

to define or detract from it. Even if this Court agrees with Sprint and finds

that § 7901.1 has a limited scope (see Sprint Brief at pp. 43-46), this Court

should harmonize § 7901 and § 7901.1 by construing § 7901.1 as an extension

of the restriction of the franchise grant in § 7901 to include local authority to

regulate temporary inconveniences caused by the construction of telephone

lines.

The County Ordinance is nothing more than a reasonable restriction on

a telephone corporation’s use of the public rights-of-way. These restrictions

are proper burdens on a franchised telephone corporation’s exercise of its

authority under § 7901 to construct telephone lines. For this reason, the Court

should affirm the Court of Appeal’s holding that § 7901 does not preempt the

County Ordinance.

30

III. SPRINT IS NOT A “TELEPHONE CORPORATION” THAT HAS A STATE FRANCHISE TO CONSTRUCT “TELEPHONE LINES” IN THE PUBLIC RIGHTS-OF-WAY. A. Sprint’s Wireless Facilities Are Not “Telephone Lines” As

That Term Is Used In § 7901.

By its terms, § 7901 only gives a “telephone corporation” the power to

construct “telephone lines.” The Court of Appeal found that Sprint’s wireless

facilities are “telephone lines” as that term is used in § 7901—not because of

the language of § 7901 itself—but because the definition of the term

“telephone line” in Public Utilities Code § 233 includes equipment used for

communication by telephone “‘whether such communication is had with or

without the use of transmission wires.’” (Court of Appeal Opn. at p. 16,

quoting Pub. Util. Code § 233.) In so doing, it erred.

The wireless telephone had not been invented in 1905 when the

franchise was first granted to telephone corporations. The Legislature could

not have contemplated in 1905 that telephone corporations would one day be

able to construct facilities on utility poles that would enable a person driving

in his or her car to make or receive a telephone call on a device that could fit

in the driver’s hand. At that time, the Legislature had no need to, and thus did

not, define the term telephone line in Civil Code § 536 to include the facilities

used to provide such a service.

Under analogous circumstances, this Court held that the pre-1905

version of Civil Code § 536 (which was limited to telegraph corporations

installing telegraph lines) did not establish a statewide franchise for telephone

corporations to construct telephone lines: We have seen that this court has expressly recognized that, from a strict etymological point of view, telephone lines would not be included in the works “lines of telegraph,” or telephone corporations within the words “telegraph corporations.” We have seen further that the circumstances at that time were such that in its common acceptation the word “telegraph” must have meant only the kind of communication then known and in practical

31

use under the name, entirely excluding all idea of any such thing as the direct communication of the human voice, and that by the simple method of speaking into an instruments of such slight cost that it could be placed in every dwelling house and place of business, with the necessary result that the use of practically all of the streets would be required.

(Sunset Tel. & Tel., supra, 161 Cal. at pp. 277-78.)

Likewise, the term “telephone line” as the Legislature used it in 1905

in Civil Code § 536, could only have meant attaching wires to poles or placing

them in underground conduits, because the idea that human voice could be

communicated without wires through the use of antennas installed on utility

poles was beyond the imagination of the legislators at that time. For this

reason, § 536 contained a description of telephone lines that is not broad

enough to include wireless facilities. As a result, this Court should find that

the Legislature did not intend to grant wireless carriers a statewide franchise.

That the Legislature subsequently defined the term “telephone line,”

first in the Public Utilities Act and later in the Public Utilities Code, to include

the words “without the use tranmission wires” does not provide any support

for the Court of Appeal’s finding that Sprint’s facilities are “telephone lines”

as that term is used in § 7901. In 1911, six years after the enactment of § 536,

the Legislature enacted the Public Utilities Act and included therein the

definition of the term “telephone line” that is now in the Public Utilities Code.

The 1911 definition was identical to the definition that is now contained in

Public Utilities Code § 233 except for one important difference. The 1911

definition provided a definition for the term only “when used in this act.”

(Public Utilities Act § 2(s) (Stats. 1911, Extra Sess., ch. 14, p. 21) [repealed],

emphasis added.) In 1911, the Legislature did not move the franchise grant

into the Public Utilities Act. It remained part of the Civil Code. Thus, in

1911 the Legislature clearly stated its intent that the definition of the term

32

“telephone line” was for the sole purpose of establishing the CPUC’s

jurisdiction over telephone corporations—not to broaden the franchise grant

that was contained in an entirely separate “act”—the Civil Code.

When the Legislature repealed the Public Utilities Act and enacted the

Public Utilities Code in 1951 it had an opportunity to clarify whether the

broad definition of “telephone line” should apply to the franchise grant that

would be recodified as § 7901. Nonetheless, the Legislature continued to

express its intent to exclude that definition from the franchise grant.

The Legislature determined that the definition of the term “telephone

line” in the Public Utilities Code should only “govern the construction of this

part.” (Pub. Util. Code § 203.) The word “part” in § 203 refers to Part 1

(Public Utilities Act) of Division 1 (Regulation of Public Utilities). In so

doing, the Legislature intended to retain the CPUC’s broad jurisdiction over

telephone corporations that it had established in the Public Utilities Act. By

placing § 7901 in Division 4 (Laws Relating to Utility Corporations and their

Employees), where the definition of “telephone line” expressly did not apply,

the Legislature intended to continue to limit the types of “telephone lines” that

could be installed in the public rights-of-way under the franchise grant to

those facilities identified in § 7901.

The Court should reverse the decision of the Court of Appeal and find

that Sprint’s wireless facilities are not “telephone lines” as that term is used in

§ 7901. B. Sprint Is Not A “Telephone Corporation” As That Term Is

Used In § 7901.

Even if this Court finds that the definition of “telephone line” that is

contained in § 233 controls, this Court should still find that Sprint is not a

“telephone corporation” under § 7901 because Sprint does not have a CPCN.

33

After 1905, but prior to the enactment of the Public Utilities Act in

1911, telephone corporations could construct telephone lines in the state based

entirely on the franchise grant contained in Civil Code § 536. (See Postal

Telegraph-Cable Co. v. Railroad Commission (1927) 200 Cal. 463, 472

(“Postal Telegraph”) [applying reasoning to telegraph corporations].) That

was no longer the case after the Legislature enacted the Public Utilities Act in

1911. By then, a telephone corporation could not operate in the state without

first obtaining a CPCN. (See Oro Electric, supra, 169 Cal. 466 at p. 475;

Williams Communications, LLC v. City of Riverside (2003) 114 Cal.App.4th

642, 648 [a telephone corporation “must obtain” a CPCN “in order to

construct facilities”].)

Thus, that an entity might control “telephone lines” as that term is

defined in § 233 does not make that entity a telephone corporation under state

law, despite the definition of the term “telephone corporation” in § 234

(anyone “managing any telephone line for compensation within this state”).

Instead, to be a telephone corporation that is legally entitled to enjoy all the

benefits the state has offered to such an entity (including a franchise under

§ 7901), the entity must have a CPCN. Sprint does not have a CPCN and

under state law Sprint is no longer entitled to obtain one. (See p. 14, supra.)14

This Court should find that Sprint is not a “telephone corporation” as

that term is used in § 7901.

14 Even if certain telephone corporations can claim to have vested

rights under state law (see p. 29, n.13, supra), those rights are not protected from preemption by federal law. (See Allied Structural Steel Co. v. Spannaus (1978) 438 U.S. 234, 257-58 [dis. opn. of Brennan, J.].)

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IV. THIS COURT SHOULD NOT DECIDE WHETHER FEDERAL LAW PREEMPTS § 7901.

Sprint claims in this case that § 7901 preempts the County Ordinance.

Having lost this claim both before the trial court and in the Court of Appeal,

Sprint argues for the first time before this Court that the Telecommunications

Act of 1996 preempts § 7901. (Sprint Brief at 51-53.) This Court should

neither decide this issue, nor find for Sprint, for four reasons.

First, the issue Sprint has first raised on appeal is an extremely

important one that should not be decided without any input from the lower

courts or the Attorney General. Sprint is asking this Court to find that federal

law preempts a state law that has been on the books in California for over one

hundred years and that has fostered the deployment of telephone lines

throughout the state unfettered by local franchises or franchise fees. Because

this claim has been raised for the first time on appeal, this Court could

invalidate a state law without the Attorney General having the opportunity to

be heard. Had Sprint properly raised this claim in the trial court, and had the

trial court found for Sprint, Sprint would have been required to send notice of

the judgment to the Attorney General, who could have intervened in this case

as a matter of right. (See Code Civ. Proc. §§ 664.5, 902.1.)

Second, Sprint’s reliance on the Ninth Circuit’s recent decision in

Sprint Telephony PCS, L.P. v. County of San Diego (9th Cir. 2007) 479 F.3d

1061, to support its argument that 47 U.S.C. § 253 preempts § 7901 is

misplaced. Even though that case concerned the same County Ordinance,

Sprint’s claim in its federal court complaint was that § 253 preempted the

County Ordinance—not that § 253 preempted § 7901. (See id. at pp. 1075-

76.) Moreover, the Ninth Circuit’s decision was based on that court’s finding

that § 253 preempted the requirements for obtaining a permit under the

35

County Ordinance. (See id.) Those findings are inapplicable to Sprint’s

claim that § 253 also preempts § 7901.

Third, the Ninth Circuit was required to apply controlling law from

other Ninth Circuit decisions. Other courts have questioned the Ninth

Circuit’s reasoning. As another circuit court recently held, the Ninth Circuit’s

decisions have relied on a “creative quotation” of § 253 that “distorted” the

“precise meaning” of the statute. (Level 3 Communications, L.L.C. v. City of

St. Louis (8th Cir. 2007) 477 F.3d 528, 533.) This Court is not so bound by

the Ninth Circuit’s interpretation of § 253.

Finally, Sprint cannot look to 47 U.S.C. § 332(c)(7)(B)(ii) to preempt

the County Ordinance. Under this section, a state or local government “must

act on a request” to construct a wireless facility “within a reasonable time.”

Consistent with the statutory language, all of the cases Sprint cites concern

either challenges to local moratoria on wireless facilities permits (which

resulted in unreasonable delays in considering applications) or failures to

timely approve or deny a particular application for a permit to construct a

wireless facility. (See Sprint Brief at 52-53 and cases cited therein.) Sprint

has not cited any case, and Amici are not aware of any case, in which a court

has found that § 332(c)(7)(B)(ii) preempted a local zoning ordinance simply

because the permitting process contained therein could take some time, as

Sprint tries to do here.

36

CONCLUSION

Amici Curiae support the County of San Diego in respectfully asking

this Court to affirm the decision of the Court of Appeal in part, reverse the

decision in part, and enter judgment in favor of the County of San Diego. Dated: May 4, 2007 DENNIS J. HERRERA

City Attorney BURK E. DELVENTHAL Chief Government Team Deputy THERESA L. MUELLER Chief Energy and Telecommunications Deputy DANNY Y. CHOU Chief Appellate Attorney WILLIAM K. SANDERS Deputy City Attorney By: WILLIAM K. SANDERS Deputy City Attorney Attorneys for Amici Curiae League of California Cities and California State Association of Counties

37

CERTIFICATE OF COMPLIANCE

I hereby certify that this brief has been prepared using proportionately

double-spaced 13 point Times New Roman typeface. According to the “Word

Count” feature in my Microsoft Word for Windows software, this brief

contains 10,591 words up to and including the signature lines that follow the

brief’s conclusion.

I declare under penalty of perjury that this Certificate of Compliance is

true and correct and that this declaration was executed on May 4, 2007.

DENNIS J. HERRERA

City Attorney BURK E. DELVENTHAL Chief Government Team Deputy THERESA L. MUELLER Chief Energy and Telecommunications Deputy DANNY Y. CHOU Chief Appellate Attorney WILLIAM K. SANDERS Deputy City Attorney By: WILLIAM K. SANDERS Deputy City Attorney Attorneys for Amici Curiae League of California Cities and California State Association of Counties

38

PROOF OF SERVICE

I, Kiana V. Davis, declare as follows:

I am a citizen of the United States, over the age of eighteen years and not a party to the above-entitled action. I am employed at the City Attorney’s Office of San Francisco, City Hall, 1 Dr. Carlton B. Goodlett Place, Room 234, San Francisco, CA 94102-4682.

On May 4, 2007, I served the following document:

APPLICATION FOR LEAVE TO FILE AMICI CURIAE BRIEF

AND BRIEF OF AMICI CURIAE THE LEAGUE OF CALIFORNIA CITIES AND THE CALIFORNIA STATE

ASSOCIATION OF COUNTIES IN SUPPORT OF DEFENDANTS/ RESPONDENTS THE COUNTY OF SAN

DIEGO, ET AL. on the following persons at the locations specified:

John J. Sansone Thomas D. Bunton County of San Diego 1600 Pacific Highway, Room 355 San Diego, CA 92101-2469 Attorneys for Defendants/Respondents Hon. Charles R. Hynes Judge of the Superior Court Department 66 330 West Broadway San Diego, CA 92101

Daniel T. Pascucci Nathan R. Hamler Mintz Levin Cohn Ferris Glovsky and Popeo PC 9255 Towne Center Drive, Suite 600 San Diego, CA 92121 Attorneys for Plaintiff/Appellant California Court of Appeal Fourth Appellate District 750 B Street, Suite 300 San Diego, CA 92101

BY UNITED STATES MAIL: Following ordinary business practices,

I sealed true and correct copies of the above document in addressed envelopes and placed them at my workplace for collection and mailing with the United States Postal Service. I am readily familiar with the practices of the San Francisco City Attorney’s Office for collecting and processing mail. In the ordinary course of business, the sealed envelopes that I placed for collection would be deposited, postage prepaid, with the United States Postal Service that same day.

I declare under penalty of perjury that the foregoing is true and correct. Executed May 4, 2007, at San Francisco, California.

KIANA V. DAVIS